Addressing the Authorised Push Payment (APP) Fraud Problem
What is Authorised Push Payment fraud?
Authorised push payment fraud (APP) occurs when a financial criminal dupes an innocent party into sending a payment under false pretences to a recipient bank account the criminal has control of.
This type of fraud can happen to both private individuals and businesses and as payments are typically made in real time funds can be directly moved on or withdrawn before an innocent party even realises they have fallen victim to a push payment scam.
There are now more and more cases of push payment fraud due to the advancements in customer security technology and processes along with human susceptibility to social engineering.
Fraudsters use social engineering techniques and may hack into emails and other systems in order to set up their victims and as more and more consumers adopt simple ways to send money in real time it has given the fraudsters a wider pool of victims.
Push payment fraud criminals are devious and clever and victims cannot be written off as gullible fools.
In the first six months of 2018, a total of £145.4 million was lost due to push payment scams – with £92.9 million from personal accounts and £52.5 million from non personal or business accounts.
However, the burden of financial liability for push payment fraud losses is moving from the victims to financial institutions and those which have not taken adequate steps to prevent or identify fraud may very soon face further obligations to reimburse victims.
At the moment there is no silver bullet solution to push payment scams although regulators have cited collaboration and data sharing as key factors in mitigating the risk of APP fraud.
Preventing Authorised Push Payment Fraud
A holistic approach is needed looking at the application process and account lifecycle and offering a multi-layered set of provisions and solutions.
Synectics Solutions is well equipped to support the industry in addressing this challenge with is establish database of records across multiple sectors and its range of fraud detection and prevention solutions.